Over the last couple of years, the UK has gone voucher crazy. Where once discount vouchers and coupons were the realm of the mean-fisted miser, these days they have become so sociably acceptable that some people are even using them on first dates!
Type the words ‘voucher codes’ into Google and you get pages and pages of websites packed full of deals on shopping, eating out and a whole range of other activities.
But is this voucher code craze really a good thing and how do you ensure you are getting the best deals with your vouchers?
How Voucher Code Websites Work
The concept is simple. Voucher sites provide listings of deals for consumers to browse through. When a consumer sees an appealing deal, such as 20% of Top Shop shoes, they click on a link and a unique code is revealed.
At the same time, a new browser window opens to display the merchant’s website (in this case the Top Shop shoes web-page) and the consumer continues to make their purchase.
As they progress through the payment process, the consumer is asked to enter the unique code into the merchant’s website in order to receive their discount.
On the face of it, this is the ideal win, win, win position. The customer makes a saving, the shop makes another sale and the voucher code website takes a commission for the sale – everyone should be happy!
So What’s The Downside?
Whilst it looks like everyone stands to benefit, it is important to remember that voucher codes are just a sales promotion and like all sales promotions, the aim is to get people to spend more money than they need to.
A tempting offer is often all that is required to make us purchase something we don’t really want or need and if the excitement of the January sales has resulted in you coming home with something you didn’t really want, then you will know what I mean.
Remember too, that the shops offering deals are effectively investing money into the sales promotion. This investment must cover the customer discount, the commission paid to the voucher code website and very often commission paid to another intermediary (known as an affiliate marketing network) that collects and distributes the deals to the voucher code sites.
The flowchart below shows the different organisations that often form the chain in the voucher code deal:
Inevitably, the shop will want to recoup those costs and in the worst cases you could find that they have inflated the prices of products prior to offering a discount on them or that they charge more money for other related products that you are likely to buy from them.
Playing The Voucher Code Game
Now don’t get me wrong, I still believe that there are some excellent deals to be found on voucher code sites, but it is important to abide by two simple rules:
Rule 1 – Stick To Planned Purchases
Planned purchases are your regular shopping essentials (such as groceries) and the occasional extravagances (such as a new laptop that you’ve been saving up for). If you are able to get deals on products you had to buy anyway, then you will be making some pretty savvy savings; just remember the saying: ‘buy the product and not the deal’.
Rule 2 – Shop Around
When you find a deal that you like, do a little bit of detective work to find out just how good it really is. Compare the product on a couple of online stores to gauge the ‘actual’ price, then check alternative voucher code sites to see if they can match or beat the discount you have found.
Choosing A Voucher Code Website
The rising popularity of vouchers and low start-up costs of launching a voucher code website mean that there are literally hundreds of sites dotted around the internet to choose from.
However this does not necessarily increase your choice of deals, as many of the sites are supplied by the same affiliate marketing companies, so what you end up with is quite a bit of duplication.
Two of the biggest sites at the moment are: www.vouchercodes.co.uk & www.myvouchercodes.co.uk.
Both of these sites follow the general format of listing deals by categories (e.g. clothes, DIY, camping equipment, weddings), along with search functionality allowing you to type in the name of the product or service you are seeking a deal on.
Alternatively, you may be more interested in ‘deal of the day’ sites like www.groupon.co.uk or www.livingsocial.com.
Deal of the day sites operate on a slightly different basis by negotiating short-term deals with shops and services in your local area. They secure the deal by buying in bulk and then resell the deal to consumers at knock-down prices.
Another alternative are community-based deal sites, such as www.hotukdeals.com, which are forums where members report different deals that they have found online for other members to take advantages of.
Remembering that in the world of personal finance ‘loyalty does not pay’, it makes sense to follow rule number 2 and continue trying different voucher websites to ensure you are getting the best bargain.
